Values and Opportunities in Social Entrepreneurship

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However, there is a downside to this, because it can create a cultural split in the organization, while having only people from the business sector might result in the NGO adopting entrepreneurial values without a social impact. The second issue relates to governance and transparency within an NGO. This is a particularly important factor for countries e. A strong board director and transparency are also important in a decision-making process where all stakeholders, especially staff and beneficiaries, are engaged and their opinions are valued.

A democratic governance mechanism in social entrepreneurship means that NGOs can be held more accountable to their constituencies and beneficiaries, promoting a bottom-up or grassroots approach to development. It is also important to strike a balance between the economic and social objectives of entrepreneurial NGOs.

Safeguard their mission through strong governance and a robust financial system while laying a strong emphasis on social impacts assessment is therefore critical. A new concept or only a new financial structure.

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Every NGO will take its own decisions regarding social entrepreneurship depending on the local circumstances. However, they should invest in a strategy for how to improve their social impact and measure success across multiple criteria and how to be transparent about their operations and social impact. Measuring the social impact of a venture is difficult and should be done with a well prepared set of criteria and measurement mechanisms that should be developed before the social enterprise starts operating.

Although NGOs are well practiced in showing the outcome of their activities to donors, they lag behind in measuring real social impact. For a social enterprise, however, this is the core of its success and they should invest in mechanisms to show progress and stagnation in social impact. Doing so will strengthen them and will help them to build networks or alliances with other actors to improve and make social impact sustainable see more in this dossier article ' Social enterprises: catalysts of economic transition? One method of assessing impact is the Social Return on Investment SROI , which is a measuring and accounting framework for a set of values: economic, social and environmental changes.

An assessment can be made after a programme has been completed, based on actual outcomes, or can be conducted prior to starting a programme and be used to forecast values that will be achieved see more on social impact measurement in article 'What we measure affects what we do '. However, SROI seems to be more suitable for stakeholder dialogue-based investment decision-making than for tracking performance.

SROI must be repeated if it is to capture unanticipated second and third order socioeconomic effects, while other methods may be better at doing this see ' Measuring and managing societal impact ' for an overview of different social impact measurement methods. What then has social entrepreneurship to offer for NGOs? It certainly has many potential benefits that are worth consideration by NGO managers and administrators who are seeking more financial stability, independence and sustainability.

However, social entrepreneurship should be more for NGOs than just a way to diversify funding sources. With good social impact measurement and strong alliances and networks around it, there is potential for an organization to increase its local impact or even deliver economic and social change. However, social entrepreneurship also has a number of side effects, including the potential risks of NGOs being diverted from their missions, of the exclusion of intended beneficiaries who cannot pay, and exploitation by the top management of NGOs.

It is as critically important for NGOs to be aware of and to address these risks and challenges as it is for them to consider an appropriate model for social entrepreneurial engagement. Social entrepreneurship is not a panacea for all social problems. Some development and social service NGOs may find it easier to adopt a social entrepreneurial approach while those with a political and advocacy agenda may find it difficult to reconcile social entrepreneurship with their work.

Others will see themselves more as facilitators and advisors, supporting social enterprises locally rather than changing completely into a social enterprise themselves. Nevertheless, now large international NGOs like Oxfam, Save the Children, Care International and the Dutch and Asian NGOs mentioned above are experimenting with the concept of social entrepreneurship by integrating it into some of their programmes or by setting up separate social ventures, other NGOs may consider how they can contribute to this shifting development paradigm. Alan Fowler , Independent development adviser and analyst related to international development, governance and civil society.

Ongoing diversification in types of international funders will call for new entrepreneurial competencies in NGOs. They are seeking commercial income and wish to generate it in a social entrepreneurial way. Social entrepreneurship and working with business models is one way of generating new funding. Development NGOs are also working with several other options, including becoming membership organizations, working with volunteers, or funding by wealthy foundations like the Bill and Melinda Gates Foundation.

Many NGOs changed their policies and organization more than a decade ago to make the poor less dependent on them and give them more self-esteem. However, public opinion in many countries is against them. Fons van der Velden , Social Business: A novel approach to socio-political change?

The value of anthropology in social entrepreneurship - Antropología Blog

Vijaya Sherry Chand, Beyond nongovernmental development action into social entrepreneurship, Journal of Entrepreneurship, Dees, J. In the s a lot of literature came out on the opportunities and challenges of non-profit organizations to turn into for-profit organizations. Burton A. Some products and services are specially designed to serve the BOP, for example shampoo sachets. Hart of Cornell University and Reinventing strategies for emerging markets: Beyond the transnational model by Ted London of the University of Michigan.

For example iCow Kenya or VisionSpring. To understand how difficult it is to serve the poor, take a look at the mixed record of microfinance or read Better Vision for the Poor by Aneel Karnani, Bernard Garrette, Jordan Kassalow and Moses Lee.

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However, it is important to note that any operational model and set-up of a social enterprise must be considered in association with other factors on the ground. These include the political, social, economic, cultural and geographical contexts in which the social enterprise is to be established but also the particular types of services and products the parent NGO offers its beneficiaries.

Also important is the legal and legislative structure NGOs must conform to in each country or region. Alter, S. Alex Ed. Jan, B. Social Return On Investment: A practical guide for the development cooperation sector. Context, international cooperation. Development NGOs become more financially self-reliant as they experiment with social entrepreneurship. However, they face risks of being diverted from their missions.

The changing landscape of Dutch development NGOs Many Dutch development NGOs are redefining their position and role and are experimenting with adopting more entrepreneurial values within their organization. Photo by Jared Zimmerman taken in India. Cases of social entrepreneurial models for NGOs 1.

Integrated model SEAMETREY is an integrated social enterprise whose mission is to provide quality education for underprivileged children and bridge the rich-poor gap through social and cultural integration. Photo by Jennik Okodesu taken in Cambodia. The interest in social entrepreneurship surpasses the phenomenon of popularity and profit maximization.

Social entrepreneurship steers the essence to drive social change and it is that potential payoff with its lasting, transformational benefit to society that puts the field and its practitioners apart. The word entrepreneurship is a mixed blessing. On the bright side, it implies a special, distinctive ability to sense and act on opportunity, merging an out-of-the-box thinking with a unique perception of determination to create or bring about necessary changes in the world.

On the negative side, entrepreneurship is an ex posts event because entrepreneurial activities need a passage of time before their true impact becomes observable. Social entrepreneurs are leaders who need or possess two types of skills namely, the ability to channelize varied stakeholder communities and long term adaptive skills and respond to changing circumstances. Bill Drayton who started Ashoka in the year , came up with the concept of social entrepreneurship, which targeted to encourage social entrepreneurship by providing funds for social missions worldwide.

Later in , Jed Emerson and Stephen Thake carried this concept into the field of academia. The idea of social entrepreneurship acknowledged a wider recognition when Muhammad Yunus won the Nobel Peace Prize for initiating Grameen Bank to create economic and social development through micro credit.

A SE is an institute that trades the private gain and also generates positive social and environmental consequences. As expressed by Kerlin , there are ample definitions of SE which also reflect different regional differences. For example, in the US, SE addresses the market-based approaches to income generation and social change, whereas in Europe, SE is located in the cooperative tradition of collective social action.

The UK derives from both backgrounds implying that SE is chiefly a business strategy with social objectives whose profits can be reinvested for that purpose in the business or in the community, rather than being driven by the need to maximize profit for shareholders and owners. Social entrepreneurship can imply different concepts to different people. Some people attribute it to non-profits or earned income ventures, others mention it as business owners who incorporate social responsibility into their operations but eventually, any definition of social entrepreneurship should characterize the need for an alternative market program that works for business entrepreneurs.

There is a need to determine the organizational need and purpose and carry out a detailed analysis of how the product or service bridges the gap in ensuring that these needs satisfy the desired social objectives Fig. Social entrepreneurs are like the catalysts for society just in the same way as entrepreneurs change the face of business. Social entrepreneurship consists of improvising systems, devising new approaches, grasping opportunities others miss and generating solutions to change society for the better.

Several parameters differentiate social entrepreneurship from the present ways of traditional business ventures. Strategy- In social entrepreneurship, strategy followed is cooperative rather than competitive owing to the social mission of entrepreneurs, poor working capital and market orientation. Financing- Funding for business enterprises is accomplished through issuance of ownership shares - stocks or incurrence of long term debts - bonds or short term debt - loans. These sources can be used by for-profit SE ventures to raise funds and the not-for-profit SE ventures can also borrow funds or accept donations by charging admission, sales or rental.

Thus, the difference in funding between for profit and not-for-profit social organizations lies in the peculiarity between investors and donors. Market- Business entrepreneurs function in a marketing environment where the supply and demand indirectly influence the price and quantity of the product sold or service rendered. On the other hand, a social entrepreneur marketing environment usually implies that the costs are not fully covered by the revenue. Governance- Business entrepreneurship is administered by a Board of Directors accountable to the owners and the stakeholders.

Non-profit social entrepreneurship ventures have the possibility of a different governance structure. They can form a subsidiary organization managed by a business enterprise board if they want to run a part of their enterprise for profit. Market failure- One theory articulated behind the existence of social purpose organizations is that they emerge when there is a social-market failure, i.

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This can be due to the incapability of those needing the services to pay for them. A problem for the commercial entrepreneur is an opportunity for the social entrepreneur. Mission- The essential purpose of social entrepreneurship is creating social value for the greater public good whereas commercial entrepreneurship targets at creating profitable operations resulting in private gain.

This contrast is fairly overstated. Commercial entrepreneurship does benefit society in the form of new and valuable goods, services, and jobs and can have transformative social impacts.

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  • Nevertheless, the basic differences in purpose and reward can still be useful for comparative analysis. Resource mobilization- The non-distributive restriction on surpluses generated by non-profit organizations and the embedded social purpose of for-profit or hybrid forms of social enterprises confines social entrepreneurs from entering into the same capital markets as commercial entrepreneurs.

    Also, the finances of a social entrepreneurial venture often make it challenging to recompense staff as competitively as in commercial markets. Performance measurement- The social aim of the social entrepreneur endures greater challenges for measuring performance than the traditional entrepreneur who can count on relatively tangible and quantifiable measures of performance such as financial indicators, market share, customer satisfaction, and quality.

    Furthermore, the various financial and nonfinancial stakeholders to whom a social entrepreneurial firm are accountable to are greater in number and more diverse thereby causing more complexity in managing these relationships. Business models pave a useful path and are effective tools for corporate decision-makers to capture information, analyse situations and make decisions in order to create competitive advantages for enterprises.

    Nevertheless, with more competition and less market capacity, traditional businesses face many challenges. There are numerous opinions about the drivers of business model innovation such as the push of technology and market demand, the pressure of competitors and the influence of the inner decision-makers etc. A varying model is the essential rationale for an industry to remain profitable in a dynamic environment. Business model innovations can outspread and leverage core assets, capabilities and relationships.

    There are four types of innovations Linder and Cantrel described. Realization model- Companies utilize the potential of their current business model and maximize the returns from their prevailing operating logic. Renewal model- Companies rejuvenate their product and service platforms, brands, cost structures etc. In comparison to the traditional ones, social entrepreneurships function in a fundamentally different way due to the first mission of a social value. Subsequently, it is a Journey-Model-Innovation.

    The motives that social entrepreneurships use to select a new business model depend on the instinctive demands of the society. As the eventual purpose of business model innovation of social entrepreneurship is looking for the balance between social value and keeping sustainable development. If we only target social value without thinking through the economic capability, it cannot uphold long-term growth. On the contrary, highlighting the economic profit maximization but disregarding social mission is the traditional logic.

    The success can be defined only when we realize striking a balance between the social and managerial logic which can be evaluated from the given diagram. We can identify two coinciding and possibly contradictory conceptions of social entrepreneurship. The first element emphasizes on social outcomes, social change and social impact which puts the significance in social results of the activity.

    Other elements in the literature emphasizes on generating revenue and a surplus and on demonstrating business prowess in the pursuit of social outcomes. Social entrepreneurs must reflect the proper balance between investment in the revenue-generating part of the firm and investment in the portion accountable for achieving social outcomes. We should now need to turn our attention to the challenge of running a social enterprise in the face of such apparent contradictions and complexities.

    We need a framework and characterization to fit social entrepreneurship in place.

    The value of anthropology in social entrepreneurship

    Development strategy- In the social entrepreneurial process, development strategy resides in producing a level playing ground for everybody. Unlike in the business development process where new product development is directed towards financial rewards, here it focuses on social benefits. The conventional approach to product development encompassing loose assessment of technology and market or in some cases a total lack of assessment still thrives in current development strategy of SE. Adding more to this situation, the basic problems inherent in new product development in the business world are still relevant in SE.

    Developmental objectives- Effective incorporation of market and technology strategy is absent in current deployment of a framework for development strategy. Customer support is a weakening strand in current SE developmental effort. There is total deficiency of customer incorporation in the strategy front end.

    Usually entrepreneurs just launch products that they think will fulfil the need of customers without getting them involved. It is important to know what the exact problem is and how accurately this problem affects people who will be our potential customers.

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    Financing- It can be done in two ways. Bootstrapping is a process of financing a small firm through innovative acquirement and use of resources without raising money from other traditional sources or a bank. Venture capitalists VC are another way of funding. Presently, venture capitalists are seldom able to fund small start-up firms or a social organization irrespective of the quality of the venture due to definite investment criteria, not being integrated in the development process and high costs of diligence, negotiating, and monitoring.

    The team- Entrepreneurs are very passionate about their goals. Sometimes they are not experts in the field or sometimes they may belong to the domain but the desire for change is something that is very common to all of them. The actual development channel in existing practices implemented by social entrepreneurs goes through different steps and shapes but mutual to each of them is the fact that ideas stream freely in an uncontrolled manner. There are no stringent gateways during the filtering and fine-tuning of ideas. Many social entrepreneurs contracted the neck of the development funnel for screening of ideas by intuition based on the situation they are facing at that time.

    These development processes vary considerably from the business development process and abstain from using the business development model. Review your vision and mission- Each organisation has a mission and a vision that is steered in the direction of its long term goal and purposes. So in this context, the purpose is socially oriented. Establishing the risk willingness of the organization- Some stakeholders do not favour risks while others outdo in risky ventures. This is the fact that makes social enterprises involve greater risky investments compared to business enterprises specifically because monetary returns do not drive social investments.

    Establish the mission outcome of the business- Here we target the preferred results from the mission and establish the scope of the mission. The user community is also integrated into the process at this level so as to better comprehend and adapt to their need. Idea generation and refinement- Though idea generation starts along with the review of mission, they are modified and refined according to the perceived social need or to address a gap in the society.

    Incubation- Once the idea generated has been refined, implementation starts with a small chunk. This is because venture capitalists are not involved at this point. Business plan- When the above phases are successfully accepted by the stakeholders, we can now develop the business plan.

    Social Entrepreneurship: Definition and Boundaries

    At this level, the entrepreneur is getting ready for full market implementation. In defining social entrepreneurship, it is also important to establish boundaries and provide examples of activities that may be highly admirable but do not fit in the definition. Failing to identify boundaries would leave the term social entrepreneurship so wide open as to be essentially meaningless. The innovation can take the form of new products and services, new production and distribution methods, or new organizational models. For example, First Book designed a new distribution model to serve low-income children in the US with top quality education content, while mothers2mothers in South Africa tapped into a new labor supply — HIV positive mothers, called Mentor Mothers — to reduce dramatically the mother-to-child HIV transmission rate in pregnant women.

    Creating the greatest impact requires leveraging market forces and business practices wherever possible. That means generating income from the sale of your products or services, yes, but it also means driving a relentless results-based focus throughout the organization, just as any commercial enterprise would. In addition to continuous innovation and business practices, social entrepreneurs have two other key characteristics in common.

    The first is that they maintain an openness to learning. Social entrepreneurship, after all, is a learning process by design. That process involves conceiving a more effective way to address a poorly met need; testing and refining the initial concept; mobilizing the resources and partners necessary to scale the model; and continuously improving the offering through rigorous impact measurement and an openness to incorporate feedback. Finally, and most importantly of all, social entrepreneurs are driven by values: dignity, access to opportunity, transparency, accountability, equity, and empowerment.

    Values and Opportunities in Social Entrepreneurship Values and Opportunities in Social Entrepreneurship
    Values and Opportunities in Social Entrepreneurship Values and Opportunities in Social Entrepreneurship
    Values and Opportunities in Social Entrepreneurship Values and Opportunities in Social Entrepreneurship
    Values and Opportunities in Social Entrepreneurship Values and Opportunities in Social Entrepreneurship
    Values and Opportunities in Social Entrepreneurship Values and Opportunities in Social Entrepreneurship

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